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2019 (2) TMI 719 - AT - Income TaxSuppression of closing stock - AO has made addition on account of non-disclosure of closing stock as it was not shown in column 4 of Part A, P&L in the income tax return - Held that:- AO observed that excess of assets in the shape of closing stock is his profit, which is not declared as income by the assessee. The assessee’s claim that he should get benefit of provision of deduction u/s. 80JJA of the Act is not tenable because the addition has been made on account of undisclosed closing stock of Hindustan Sanitary Plaza, and this concern dealing in sanitary items. As this income is not derived from the activity of manufacturing which is covered u/s. 80JJA, no deduction is allowable. Hence, the addition was rightly confirmed by the Ld. CIT(A), which does not need any interference Disallowance of 25% of expenses claimed under the heads consumables, power/ fuel, packing, freight, miscellaneous, telephone, conveyance, travelling etc. - no vouchers were produced for expenditure claimed - Held that:- AO has not made disallowance on adhoc basis but after giving full opportunity to the assessee who could only submit evidence of expenditure of about ₹ 8 lacs out of his claim of ₹ 54.92 lacs. In view of the facts of the case, the disallowance made by the AO was upheld. However, it was restricted to 1/10th of the expenditure not substantiated by the assessee i.e. ₹ 4,70,000/- which was disallowed and therefore, the AO was directed to compute the income accordingly, which does not need any interference on my part, therefore, uphold the order of the Ld. CIT(A) on this issue and reject the ground raised by the Assessee. - Decided against assessee.
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